What is characteristic of the economic order quantity (EOQ)?
A) the quantity that maximizes total profit
B) the quantity that maximizes carrying costs
C) the quantity that minimizes total ordering cost
D) the quantity that minimizes total inventory-related costs

Question

Quizplus · Accepted Answer

The economic order quantity (EOQ) is the quantity that minimizes total inventory-related costs, including ordering costs and carrying costs. The EOQ formula takes into account the trade-off between these costs to determine the most cost-effective order quantity. Maximizing total profit or minimizing only ordering costs or carrying costs would not necessarily result in the optimal order quantity.

What Is Characteristic of the Economic Order Quantity (EOQ)